School Fee Regulations and Legal Compliance: An Analytical Overview

By Vikram Deshmukh

Fee Regulations and Legal Compliance: An Analytical Overview

(The Acts referred for comparative analysis are The Tamil Nadu Schools(Regulation of Collection of Fee)Act,2009; The Rajasthan Schools(Regulation of Fee)Act,2016; The Gujarat Self-financed Schools(Regulation of Fees)Act, 2017; The Uttar Pradesh Self-Financed Independent Schools(Fixation of Fees) Ordinance, 2018; The Karnataka Education Act, 1983; Maharashtra Educational Institutions (Regulation of Fee) Act, 2011)

Many concerns have emerged during the process of rapid expansion of private educational institutes in the last few decades. Especially in a developing country like ours Public Institutions were unable to cope with the rising demand. Private institutions play a vital role.

The number of students opting for Private Educational Institutions from KG to PG has increased tremendously. These institutes provide infrastructure, facilities, and a different approach to impart education to cater to the aspirations of an evolving society. This resulted in making education a bit expensive compared to earlier times.

This increase in expenses resulted in parental allegations of exorbitant fees being charged, profiteering, and commercialization. This has resulted in The Central and State Governments coming up with legislation to regulate the fees charged.

Central and State Governments have made an effort to curb these practices by bringing in legislation to prohibit capitation fees from being charged. Still, the requirement to put in place the mechanism of Fee Fixation / Approval was very much evident.

T.M.A. Pai Foundation and Others Versus State of Karnataka and Others, (2002), made it necessary for these regulations to stand the test of restrictions being reasonable as educational institutes were conferred with the status of occupation.

P.A. Inamdar & Ors vs State Of Maharashtra & Ors laid down the principle for computation of fees being per child expenses plus surplus for developmental purposes.

Tamil Nadu was the first state to come up with the mechanism followed by Karnataka, Maharashtra, Rajasthan, Gujarat, and UP.

The analysis of these Regulations shows that they prescribe the manner in which the fees are to be proposed, the relevant documents and records to be presented, the authority for fixation/approval of fees, the factors to be considered for computation of fees, tenure at which the fee can be revised, the timelines to be followed by the Schools & the committees at each and every stage, maintenance of records, an inspection of records, the procedures to be followed by the committees, constitution of committees, qualifications-disqualification-tenure-removal of members of the committees, Cognizance and penalties, etc.

The purpose of the present paper is an analytical overview of the Compliance of Legislation by the Schools, the same is discussed in detail here.

Purpose

The purpose of all these legislations is to provide the regulation of the collection of fees by schools in the respective states.

Applicability

These legislations are applicable to all the schools operating in the respective state affiliated with any board of education recognized by the state or central government. They prescribe the process for fixation and approval of fees by Private/Self-Finance / Unaided schools belonging to the Minority and Non-Minority institutes with exception of non-applicability to minority institutes in Karnataka.

The institutes run by the Government or receiving aid or assistance and also those institutions imparting “only” religious education are excluded.

These legislations differ on the point of inclusion of the Pre-Primary section when defining a school. The legislation of the states of Maharashtra, Gujarat, Tamil Nadu, and UP include this and the state of Rajasthan excludes this section.

The legislation of UP specifies the exclusion of standalone Pre-Primary. The legislation of Gujarat excludes exclusive pre-primary classes, playgroups, and crèches not attached to any school. It also excludes schools charging fees lower than what is notified by the state.

UP legislation includes only schools where a total payable possible fee of any student is more than Rupees Twenty Thousand per annum.

The definition of Student in the Rules of the Legislation of Maharashtra also results in the exclusion of the Pre-Primary section as a student is defined as someone studying in classes 1 to 12.

Authority to Fix or Approve Fees

These legislations prescribe different authorities for the fixation of fees.

Maharashtra & Rajasthan Legislation empowers the school level committee termed respectively as Executive Committee of PTA or The School level Fee Committee; the constitution of both differs.

These legislations put the onus of the formation of these committees on schools and even empower these committees to fix or approve the fees by following the prescribed procedures. Maharashtra & Rajasthan Legislation provides for reference/appeal to Divisional Fee Regulatory Committee; and The Revision Committee as the appellate authority for DFRC.

Tamil Nadu Legislation empowers the State level Committee for the purpose of determination of the fee for admission to any standard or course of study in private schools.

UP Legislation defines Divisional Fee Regulatory Committee constituted as the appropriate authority for the purpose of fixation of fees. State Appellate Authority of Self-Financed Independent Schools is empowered to decide appeals of DFRC orders.

Gujarat Legislation provides for Fee Regulatory Committee for Zones compromising of such districts as may be notified. The fee Revision Committee is constituted for the purpose of revision against the order passed by the Fee Regulatory Committee.

No external agency or members are involved in the process of Fee fixation or approval in accordance with Karnataka Legislation.

Time Lines for Submission of Fee Proposal

Maharashtra Legislation mandates the management of the school to submit the details of the proposed fee along with the relevant records to the executive committee for its approval at least six months before the commencement of the next academic year.

Every private unaided educational institution of Karnataka shall disclose before 31st December of every calendar year its fee structure for the ensuing academic year.

Tamil Nadu State Committee requires each private school to place before the committee the proposed fee structure with all relevant documents and books of accounts for scrutiny within the such date as may be specified by the committee.

UP legislation mandates every recognized school to file with appropriate authority a full statement of the fees to be levied by the such school during the ensuing academic year before the commencement of each academic year. The school needs to upload a statement of fee on its website sixty days prior to the commencement of each academic year.

The Self-financed schools from Gujarat shall prepare and submit to the Fee Regulatory Committee, a proposal in the prescribed form, for fixation of fee structure, containing the particulars specified in it, for consideration and approval not later than the the31st October of the year of the proposal.

The management of schools from Rajasthan shall submit the details of the proposed fee along with the relevant records to School Level Fee Committee for its approval at least six months before the commencement of the next academic year.

Factors for Determination

The prescribed factors for determination by all these legislation can be summed up as the location of the school, the infrastructure made available and facilities provided, the educational standard of the school, expenditure on administration and maintenance, qualified teaching and non-teaching staff and their salary components, a reasonable amount for salary increments, the excess fund from donations or free ships, expenditure incurred over students on the total income of the school and the reasonable surplus for qualitative development, facilities given by schools under e-governance i.e. hardware and software facilities, other facilities made available to students such as swimming pool, horse riding, shooting, Archery and performing art, etc.; supply of books, notebooks, etc., and other educational material provided to students; transport fee, Mid-Day Meal or snacks; Any other factor approved by the appropriate authority., with few additions or deletions state wise.

Relevant documents

The documents which help the appropriate authority to determine the fees to be charged are the ones termed as relevant documents. All legislations prescribe making all this information available in the public domain.

Maharashtra & Rajasthan Legislations are silent on this point with just a mention of “Relevant Documents/ Relevant Records” respectively.

Gujarat, UP, Karnataka, and Tamil Nadu Legislation specify more or less this as an audited book of accounts, details of teaching resources, a statement showing computation and compliance of fee structure, list of facilities and things provided, the total number of students and per child expense, concessions and scholarships offered if any, etc.

Computation

The principle laid down for computation is expenses incurred on the factors for determination supported by the evidence in the manner of relevant documents.

UP legislation prescribes specifically the rate of inflation also as one of the components for computation. Contrary to the principle of per child expense it also prescribes different fee structures for Old and New students studying in the same class or Std.

Karnataka legislation prescribes the specific method for computation by considering the correlation between certain percentages of overall Salary expenses as non-Salary expenses depending on the location of the school. It also prescribes the specific method with the introduction of the normative net expenditure (NNE) for the ensuing academic year based on the normative total expenditure (NTE).

Tenure to Increase

The tenure for fee increase across the acts varies from one year to three years. Legislation of Tamil Nadu & Karnataka doesn’t specify the tenure for increase; Maharashtra is for two years; Rajasthan is two and three years; Gujarat three years and annual revision in UP.

Cap

U P legislation states that it shall not exceed the yearly percentage increase in consumer index + five percent of the fee realized in the previous year.

Maharashtra, Tamil Nadu, Rajasthan & Gujarat have no upper cap on the increase. Karnataka has an upper cap of not more than 15 %.

Records to be maintained

The prescribed records to be maintained are as follows with few additions or deletions state-wise.

General Register, Admission Registers, Fee receipt, Fee Collection Register, Cash Book, Library Register, Staff Attendance Register, Student Attendance Register, Voucher File, Cheque Register, Service Books, Stock Registers, Transfer Certificate Book, Contingency Expenditure Register, Asset Register, Building rent Register, District Information System for Education (DISE) form, Unified District Information System for Education (U-DISE) form, Minute book of school management, Register for TDS certificate.

The Principal / Head Master / Managing Trustee or authorized person of the self-financed school shall be responsible for the maintenance of accounts, records, and registers.

Inspection of records

Different authorities in accordance with provisions of the respective legislations are authorized to inspect the records to be maintained.

Penalties

The violations are to be punished in accordance with the respective provisions, which vary from penalties in the range of a few thousand to a few lakhs with the inclusion of imprisonment for a few months to a few years in respective legislations.

Guidelines Prescribed by Supreme Court

The recent interim order of the Honourable Supreme Court in the Federation of Self Finance Schools & another V/S the State of Gujarat observes that the following features if incorporated will meet the ends of justice:

·     The decision of the school to provide facilities or things of a particular quality or standard that it considers appropriate for imparting education in its school shall not be questioned.

·     The school shall have the right to offer such facilities as they consider appropriate for the standards of education which they profess to meet.

·     The schools would be entitled to fix their fee structure to meet the cost of providing such facilities or standards.

·     The percentage of surplus needs to be determined.

·     The purpose of utilization of surplus in line with objects of the organization.

Conclusion

A perusal of all these Legislations can be concluded across the states: the legislations put an onus on the schools to abide by the timelines prescribed for the purpose of presentation of the fees and formats to be followed.

All these acts make an effort to deal in detail with factors for the determination of fees. More clarity definitely is required in this aspect.

These legislations can be termed as an attempt to establish a mechanism in place for the fixation of fees which can be improved further to answer the concerns of all the stakeholders in a better manner.

The aspirations of today’s India cannot be fulfilled by just prescribing regulations as restrictions on the private players in education.

These are the times when the aspirations of new India are flying high where we need to provide wings by making it a sustainable and feasible option for a social enterprise of education. Attempting to bring in transparency is a need of the hour.